Friday, July 12, 2013

We knew this domino would fall soon, we just weren't sure where. Now that AT&T has agreed to buy Leap Wireless the parent of Cricket Wireless, we now know we'll have 4 big wireless carriers and now we know how they will be composed. It's always sad to see another carrier disappear, but this is where we're headed. We're just lucky that it looks like we'll have a Big 4 instead of a Big 2.

The Cricket name will live on, and just like MetroPCS, it will remain a brand using a different network with much better capabilities and much better coverage. This may also be an attempt by AT&T to face the future of no contracts and prepaid plans. If Cricket's customers grow faster than AT&T, the money still goes into the same pot. We also get a bit more broadband capacity among the Big survivors.

We'll watch the Cricket evolution, but it should mirror that of MetroPCS: switching phones from CDMA to GSM and broadening the names to be better nationwide competitors.

We had hopes that Cricket and MetroPCS would wind up together to make a passable 5th competitor, but, alas, that dream was not meant to be. Now what becomes of the new number 5 through 10 network? Counting them down is what we do.

4 comments:

Adam
said...

It only took 30 years to get close to what should have happened in the beginning: a semi-monopoly in wireless. Just like Ma-Bell was a natural monopoly, so should have been wireless. Just think, if we had one or two national carriers, with networks that had been built out over 30 years, with amazing amounts of spectrum, and a little regulation on the billing side. We would have service EVERYWHERE by now, with plenty of capacity, some good standards, and reasonable pricing. The government really missed the boat on that one.

I agree with your premise, however it was the introduction of a 3rd, 4th & 5th, etc. carrier to compete with the original wireless duopoly that make cellular affordable for a much larger number of people.

I disagree. Yes, there are economies of scale when you have a few operators with a lot of subscribers and spectrum in an area. But the flip side is that these companies will use their monopoly powers to extract high prices from subscribers, and roll out the bare minimum in infrastructure to keep regulators...who would be the only entity holding companies in check...at bay.

Having three or more competitors (and yes, I think that Sprint and T-Mobile will merge within the next five years) cuts down on this kind of behavior, while still allowing each operator enough spectrum and economies of scale in equipment to serve customers well, nationwide.

If you want to see what a lack of competition does to wireless service, look as Verizon's pricing. They are the sole carrier with LTE in a number of areas, and it shows; performance is generally fine, but $15-$20 per GB when I paid full price for the device is inflated.

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